Citigroup profit jumps, helped by home prices

Mon Jul 15, 2013 9:40am EDT
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By David Henry

(Reuters) - Citigroup Inc on Monday reported a stronger-than-expected 26 percent rise in adjusted quarterly profit as stronger home prices reduced losses on mortgages and bond trading revenue jumped.

The biggest boosts in profit came from its securities and banking unit, where bond trading revenue rose 18 percent, while stock trading revenue soared 68 percent, and underwriting and advisory was up 21 percent.

At the Citi Holdings unit, which houses businesses and assets the bank is looking to shed, the bank set aside less money to cover bad mortgages as the U.S. housing market showed signs of recovery.

Citigroup shares rose 2.6 percent to $52.10 in early trading.

The results underscored how the bank is returning to normal after getting walloped during the financial crisis and needing three government rescues.

"Citi is a restructuring story and it is an emerging markets story," analyst Fred Cannon of Keefe, Bruyette & Woods said before the company reported results.

Adjusted net income at the third-largest U.S. bank by assets rose to $3.89 billion, or $1.25 per share, in the second quarter, from $3.08 billion, or $1 per share, a year earlier.

Adjusted results excluded the positive impact of changes in the value of the company's debt.   Continued...

Traders work at the trading post that trades Citigroup stock on the floor of the New York Stock Exchange, in this October 16, 2012 file photo. REUTERS/Brendan McDermid/Files